[quote=ctr70]I wouldn’t buy anything to “break-even”. Why would you buy an investment to “break-even” and “hope” for appreciation with all the work and risk it takes to own rental property? Even if it does appreciate, to “realize” that appreciation and sell you pay a ton of taxes and costs anyway leaving you with 60 cents on the dollar of that appreciation. Yes you could 1031X and defer taxes, but that often happens at market peaks and you buy into another inflated property and you are forced to rush (I have heard of more horror stories of investors doing 1031X vs. just selling and paying the tax and depreciation recapture.) If you put 20% down & get a loan shoot for making $300+ per month TRUE positive cash flow after mortgage + taxes + insurance + vacancy + repairs + credit loss, etc…[/quote]
ctr70, I only “broke even” in 9 years time because the area I purchased in, during the pendency of my ownership, became a haven for the PCP trade, in both cigarette and “grass” form. The area wasn’t this way when we purchased. SDPD “Community Policing” program eventually cleaned this up and all the local phone booths were ripped out as well. There was also a (later) intermittent problem with pimping and prostitution in the immediate area. This was cleaned up significantly (after we sold) by the SDPD Vice Squad.
One of my tenants moved out in the middle of the night due to being broken into. This caused us to not only repair the door jamb but install wrought iron on the door and all the windows.
Under normal circumstances, during this time period, rental properties should have escalated in value.
Moral of this story: Never buy property across the street from a large “vacant lot.” This is a “breeding ground” for societal ills.
